The bone morphogenetic protein 2 (BMP2)-dependent onset of osteo-/chondrogenic differentiation in the acknowledged pluripotent murine mesenchymal progenitor cell line C3H10T1/2 is accompanied by the immediate upregulation of fibroblast growth factor receptor3 (FGFR3) and by a delayed upregulation of FGFR2. This direct FGFR3-mediated expression seems to be essential for the onset of chondrogenesis since the forced expression of activated FGFR3 is sufficient for differentiation into the chondrogenic lineage. The screening for FGFR3-regulated transcription factors exhibiting a chondrogenic capacity in C3H10T1/2 indentified a T-box containing transcription factor. Forced expression of this factor is sufficient for the initiation of chondrogenic differentiationin mesenchymal progenitors C3H10T1/2 in vitro. Implantation of these recombinant progenitors at ectopic intramuscular sites of the mouse was followed by massive cartilage formation substantiating the chondrogenic potential of this transcription factor. A potential role for this T-box factor in chondrogenesis is also suggested by its expression in various skeletal elements at late stages of murine embryonic development as demonstrated by in situ hybridization. These studies indicate that BMP2 triggers onset of FGFR3-dependent signaling in mesenchymal progenitors C3H10T1/2 to induce a novel type of transcription factor for the initiation of chondrogenic differentiation.